Alaska Railroad seeks funding for Port Mackenzie rail extension project

The Alaska Legislature's recent Senate Transportation meeting highlighted significant developments regarding the long-awaited Port Mackenzie rail extension project, which aims to enhance multimodal transportation opportunities in the region. With over $180 million already invested, the project has faced a decade of dormancy due to budget constraints, but stakeholders remain committed to reviving it.

The Alaska Railroad and the Mat-Su Borough are actively seeking ways to advance the project, which is seen as a top priority for local residents and businesses. The extension is expected to improve cargo efficiency for both imports and exports, particularly benefiting the fishing industry and other local enterprises. However, the estimated cost to complete the project now stands between $275 million and $300 million, raising concerns about funding and the need for a substantial anchor tenant to justify the investment.

Efforts to secure federal grants are underway, with plans to submit an application to the Federal Railroad Administration for an 80-20 funding program, which would require a local match of approximately $60 million. Discussions are ongoing with potential customers who could provide the necessary freight volume to support the rail line's operation, but securing commitments remains a challenge.

The meeting also addressed the importance of collaboration between the railroad, local businesses, and government entities to create a viable business model that would attract long-term tenants. While there are promising leads, including interest from companies in sustainable fuel production and cement importation, no firm agreements have been established yet.

As the project moves forward, stakeholders emphasize the need for continued outreach and communication to build momentum and ensure that the rail extension aligns with broader economic development goals for Alaska. The completion of this infrastructure is seen as crucial not only for enhancing transportation efficiency but also for fostering economic growth and resilience in the region.